Janice says she has only seen one minor drawback. "He's a little embarrassed that he has a card because other kids don't understand credit cards," she says. "Some of his friends assume he's spoiled and entitled to money from his parents. They think when they see it, that he can just spend whatever he wants."
Despite success stories like Zachary's, there are teenagers who just aren't ready to have their own credit card. Rebeca Castro, division manager of South Florida for Apprisen, a nonprofit credit counseling agency, says she sees many young adults come in for counseling who are deep in credit card debt. Consequently, she thinks parents should add a teenager as an authorized user before co-signing for a credit card. "I would hope that the parent would take them off as an authorized user if they're using credit irresponsibly," she says, adding that it's more difficult to close a co-signed account since both the parent and the child are jointly liable to repay the debt. Ulzheimer and Cunningham also say authorizing is a better option than co-signing.
Cunningham says parents should consider that their child's teenage years are an opportune time teach them how to use credit responsibly—before they enter the job market or go off to college and get bombarded with credit card offers. Recent research reinforces Cunningham's concern. According to a survey conducted by five universities and published in April, approximately 70 percent of college students have a credit card, and more than 90 percent of them carry a balance from month to month.
According to Cunningham, the ideal time to teach children how to use credit cards is while they're still under the parents' roof, because parents are in a position to bail their child out of a bad credit situation. She warns: "The world or the creditor is not going to be as forgiving as the parents."